The Queen v Gummer

[2006] NZCA 124

IN THE COURT OF APPEAL OF NEW ZEALAND

CA502/05

THE QUEEN

v

ANDREW JOHN GUMMER

Hearing:24 May 2006

Court:Chambers, Rodney Hansen and Priestley JJ

Counsel:J F Mather for Appellant

R B Squire QC and J L Mullineux for Crown

Judgment:13 June 2006 

JUDGMENT OF THE COURT

A        The appeal is dismissed.

BThe appellant is directed to present himself to serve the balance of the community work sentence imposed on him at the Takapuna Community Work Centre of the Department of Corrections at Wairau Road, Takapuna at 9.00am on Saturday 24 June 2006.

REASONS

(Given by Priestley J)

INTRODUCTION

[1]       In September 2005 the appellant was tried before Judge Joyce QC, in a Judge alone trial in the Auckland District Court. 

[2]       The appellant faced 24 counts laid under s 229A(b) of the Crimes Act 1961 of using documents capable of being used to obtain pecuniary advantages with intent to defraud.  Those counts all related to second hand cars which the appellant had imported into New Zealand from Japan in 1996. 

[3]       The Judge delivered his verdicts with reasons on 26 September 2005.  The appellant was found guilty and convicted on 23 counts.   He was subsequently sentenced to 175 hours community work.  The appellant challenges those convictions.

[4]       His counsel, Mr Mather, in his written submissions, raised three grounds on appeal:

a)The finding by Judge Joyce that the appellant had been dishonest was at odds with Judge Gittos’s acquittal of the appellant in an earlier private prosecution arising from the same facts.  These different verdicts brought “the criminal justice system into disrepute” and indicated that Judge Joyce’s conclusion was “a miscarriage of justice”.

b)The way in which Judge Joyce dealt with inferences was flawed.

c)Documents relied on by the Judge – which we shall be calling the Nikki documents – were inadmissible.  Before us, however, Mr Mather effectively abandoned this argument.  Little more needs to be said about it.

Background and Prior Prosecution

[5]       The appellant, either himself or through entities which he controlled, was in the business of acquiring second-hand motor vehicles in Japan, importing them to New Zealand and selling them to New Zealand buyers. 

[6]       The Crown case against the appellant was that he had arranged for the odometers of the vehicles specified in the 24 counts to be wound back (“clocked”) so that, on sale in New Zealand, the odometer of the vehicle displayed a reading significantly lower than the distance the vehicle had actually travelled. 

[7]       The documents on which the counts were based fell into two categories.  Eleven of the convictions related to standard vehicle sale and purchase agreements between United Cars (under which name the appellant traded) and New Zealand purchasers.  The second category relevant to 12 counts were Japanese Auto Appraisal Certificates which in 1996 were required before a vehicle imported into New Zealand could be allocated a VIN and consequential registration.

[8]       The Crown case was that the appellant regularly bought used vehicles in Japan at auctions organised by Nikki International Corporation (“Nikki”).  Nikki’s auctions were apparently well organised and offered large numbers of vehicles for sale.  All the vehicles were driven in a continuous stream through an auditorium.  An image of the vehicle was displayed on a large screen.  Sale sheets, both in hard copy and electronic form, could be accessed which would include the odometer reading of the vehicle.  Vehicle details were recorded in Japanese script but the odometer readings were displayed in Arabic numerals.

[9]       The standard buying procedure so far as the appellant was concerned involved employing a Japanese agent beside whom the appellant sat who would provide the appellant with relevant information in English.  A bid would be placed by the agent pressing a button on a hand-held remote device.  During the time an offered vehicle was visible on the screen, received bids were also flashed electronically on to the screen. 

[10]     The genesis of the appellant’s prosecution appears to have been a document delivered by Mr Philip Nottingham, a former Nikki employee, to the Serious Fraud Office (“SFO”) in 1996.  In 2000 Mr Nottingham mounted a private prosecution against the appellant.  The prosecution occupied 14 days in the Auckland District Court before Judge Gittos.  In a reserved judgment delivered on 2 June 2000 the Judge acquitted the appellant of one charge laid under s 257. 

[11]     The SFO played no part in the Nottingham prosecution.   Its investigations clearly took some years.  When the SFO charges were eventually laid, the appellant applied to the District Court to have the prosecution against him stayed.  His application was unsuccessful. 

[12]     So too was his application to the High Court for review of the District Court decision under the Judicature Amendment Act 1982.  The appellant appealed from the High Court’s refusal to review the stay to this Court.  In a reserved decision dated 1 December 2004 the appeal was dismissed.  Chambers J, presiding over this appeal, was a member of the Court determining the 2004 review.  Counsel, on inquiry, raised no objection to Chambers J being a member of this Court on this appeal.

[13]     A Nikki document provided by Mr Nottingham to the Serious Fraud Office in 1996 formed part of the prosecution evidence in the District Court.  The document listed various vehicles which the appellant acquired at auction.  The document was in spreadsheet form.  One of the columns was headed “Oil”.   Beside some but by no means all of the purchased vehicles the Oil column contained an entry of 5,000 Yen.  The far right hand column for those vehicles also showed rounded odometer readings. 

[14]     Beside those vehicles where a nil figure is entered in the Oil column, the right hand column would read, for example, “OK 37”, the 37 representing 37,000kms.  Those vehicles, however, which displayed 5,000 Yen in the Oil column would read, again by way of example, “58 88” which the Crown alleged indicated the vehicle’s odometer had been clocked from 88,000kms to 58,000kms. 

[15]     In 1997 and 1999 Mr P D Roigard, who at the time was employed by the SFO as an investigator, travelled to Japan.  A mutual assistance request had been lodged with the Japanese government by the New Zealand government.  During one of Mr Roigard’s visits in July 1997 he accompanied a Japanese District Public Prosecutor team to Nikki’s premises in Yokohama to execute a search warrant.  Various computer floppy disks were seized during the execution of that warrant.  One of the floppy disks, opened in Mr Roigard’s presence and copied, contained a document identical to the document supplied to the SFO by Mr Nottingham, but without the far right column showing odometer readings. 

[16]     Both before the Judge and in this Court there was considerable common ground.  There was no dispute that the odometers of relevant vehicles had been clocked.  Nor was there any dispute about the information recorded on the Nikki documents which throughout the trial were the subject of significant evidence.  Nor was there any evidentiary dispute over the documents transmitted to New Zealand from Japan as a result of the mutual assistance request.  It was also common ground at trial that where a 5,000 Yen figure (approximately $60) appeared in the “Oil” column, this was the fee charged for clocking the relevant vehicle.

[17]     The appellant gave evidence at his trial.  He denied he had anything to do with the clocking.  He accepted that clocking had occurred.  He accepted too that the relevant vehicles which he had offered for sale in New Zealand showed incorrect odometer readings.  In cross-examination he accepted that the relevant vehicles must have been clocked after he purchased them at auction but before they were exported from Japan.  He denied, however, that he had any knowledge the clocking had occurred.  He also denied he had knowingly sold these vehicles with the intention of misrepresenting the distance they had travelled to benefit from an inflated sale price.

District Court verdict and reasons

[18]     The Judge delivered a robust and carefully reasoned decision in which he rejected the explanations the appellant had given in evidence.

[19]     Relevant findings of the Judge include:

[48]     The agent was always there [at the auction] – in his case the same Nikki, or associated corporation, one.  Nothing less would be expected when, if you bought say 20 cars in a day, the fixed commissions would fetch the agency, on Mr King’s evidence, say, $20,000NZ so the agent was, as Mr King said, there to look after you every step of the way.

…

[60]     I acknowledge here that, although the Crown sought to have Mr Gummer acknowledge contemporaneous (at least related to when he got back to New Zealand) knowledge of invoice breakdowns of the totals payable for each vehicle, he would only accept sighting much more generalised one lump sum per multiple vehicle consignment documents which he said came first.  His evidence suggested that the other material would only have been sighted, and that in due course, by his staff.

[61]     So he was saying that, when he got home, any personal to him comparison of purchase price noted at the time of purchase with a short form multiple vehicle invoice would be by reference to fee or commission inclusive totals.  He asserted here that minor discrepancies (such as 5,000 yen might be counted to be) would not have caught his attention.  He would attribute those to the likes of minor repairs to the vehicle by the agent.

…

[65]     Bearing in mind that, on his own say so, he was looking for 40 to 60 thousand kilometre range vehicles (upwards of that perhaps for utility type vehicles) it follows that he must have taken a keen interest in odometer reading details – could well have been expected to look for them first and foremost – and they were plain enough to find and see, and expressed in numerals all too familiar.  In fact, he himself said “I believe I was understanding the correct mileage, yes”.

…

[68]     All this left me puzzled as to why the agent (by which I essentially mean Nikki as there is nothing to suggest individual advantage to the different personnel Mr Gummer says he met with from day to day) would want to wind the odometers back on its own account; and that to a figure conjured up by the agent at the auction itself.

[69]     Mr Gummer himself said that the supposed fraud would – needs must – involve the agent’s man falsely informing him of odometer details.  Yet there they were, variously recorded in writing and readily accessible to him as a man concerned about them – not to forget at all flashed up on the screen with other details at the time of individual vehicle presentation.  It would have taken a very brave or foolish agent (and remember Mr Gummer said he had different ones on different days) to take the risks obvious here.

…

[77]     So what, after further reflection and at that later stage of his evidence, indeed last, Mr Gummer seems to suggest as at least a reasonable possibility is that Nikki or Nikki’s men had not only clocked the vehicles off their own bat but also arranged matters so as to have it seem that that was actually on Mr Gummer’s instruction.

[78]     But amongst the obvious difficulties here for Mr Gummer’s postulation, and more fundamentally for the issue of reasonable possibility, is that on neither side of the case is there any indication that the individuals concerned – or for that matter Nikki itself – had anything of palpable significance to gain by doing so.

…

[95]     So all in all it comes back to the vital and common ground issue of whether Mr Gummer, in the various thus identified uses of documentation in which he was directly involved – or at least in the sense I have described instrumental – acted with intent to defraud.

…

[106]    It is extraordinary – unbelievable – to think that a fraudster, acting on his own, would not only charge a fee for his fraud, but also – showing even more gall – would make a very specific note of it in his own records – a note of the precise nature of it, right down to the original and clocked mileage. This has to be the case, if a fraud on Mr Gummer is a reasonable possibility.

[107]    There is no evidence that there was any shortage of vehicles actually in the range Mr Gummer sought – 40 to 60 thousand kilometres; no evidence of anything that would drive, or even encourage, agents to rewind on a unilateral basis.

…

[110]    There are some 24 or so purchases in issue here.  It beggars belief that Mr Gummer could have been safely (from the agent’s point of view) misled so many times.  The rewinds were substantial.  Vehicles, in truth, well beyond Mr Gummer’s acceptable mileage range were pulled back into range.

[20]     The above portions of the judgment fairly show the route, which additionally included close examination of relevant evidence, whereby the Judge concluded that 23 counts had been proved beyond reasonable doubt.  The count on which the appellant was acquitted encountered problems over whether the relevant vehicle had in fact been sold in New Zealand.

Discussion

[21]     As to the abandoned point relating to the admissibility of the Nikki documents, a challenge to their admissibility was raised on the first day of the trial by the appellant’s then counsel, with particular reference to documents handed to Mr Roigard by Mr Nottingham.  The Judge appears to have admitted them provisionally on the basis of Mr Squire QC’s submission that the documents had been handed to Mr Roigard and that their significance would depend on inferences the Judge would be invited to draw, coupled with other documents, as the trial proceeded.  But no final ruling was ever made, as Mr Squire accepts.

[22]     We doubt whether there could be any successful challenge to the admissibility of the Nikki documents.  Before us Mr Mather decided not to pursue the point.  He accepted that, in any event, the facts which the documents were tendered to prove were established by other evidence.  We mention the point here solely because of the centrality of the Nikki documents to the verdicts.

[23]     The first remaining point of appeal was a perceived difficulty flowing from what counsel considered were two inconsistent District Court judgments dealing with similar crimes and the same facts.

[24]     Mr Mather accepted that the ingredients of the s 257 charge (conspiracy by deceit or falsehood to defraud) laid privately by Mr Nottingham which resulted in an acquittal in June 2000 were different from the ingredients of charges under s 229A(b).  Nonetheless counsel submitted the mens rea element of both crimes was identical.  The different results were clear indications of a miscarriage of justice which would bring the criminal justice system into disrepute.

[25]     We reject that submission.  Issues of double jeopardy were not involved.  A stay application, largely calling into aid the 2000 acquittal, was unsuccessful.  Not only were the s 229A(b) charges different from the s 257 charge but so too was the nature and volume of the evidence.  In general terms, evidence of the outcome in an earlier trial, including an acquittal, is irrelevant and inadmissible in a subsequent trial: Hui Chi-ming v The Queen [1992] 1 AC 34 at 42-43 (PC) and Mathieson (Gen Ed) Cross on Evidence (NZ looseleaf ed) at [12.38].  Mr Mather’s submission, of course, is even bolder.  Not only would he have us take into account the earlier acquittal (even though it was not in evidence before Judge Joyce).  The effect of his argument is that the earlier acquittal was in a de facto sense binding on Judge Joyce:  for him to come to a different conclusion from Judge Gittos indicates, so the submission goes, a miscarriage of justice.  That effectively amounts to a submission that the second prosecution was an abuse of process, an argument which this Court earlier rejected.

[26]     Counsel were agreed that the central issue to be determined in this appeal was the second remaining point, whether the Judge’s conclusion that the Crown had established the necessary intention to defraud, arising from the appellant’s knowledge of the clocking, was an available inference to be drawn from the evidence.  Mr Mather for the appellant accepted that if the Judge’s conclusions in that regard were correct then all the necessary ingredients of s 229A(b) would have been established on the evidence available to the Judge.

[27]     On the Judge’s finding that the appellant had knowledge of the 23 relevant vehicles being clocked, counsel submitted that the appellant was not alone in having a motive to arrange the clocking.  The agents who attended the auction and assisted with the bidding also benefited, through commissions, from sales, as indeed had Nikki.  These agents too had ample opportunity to mislead the appellant prior to bids being lodged at the auction.  Unlike the appellant the agents had access to relevant auction documents and car log books.

[28]     Counsel further submitted that, quite apart from what Nikki and the agents might stand to gain from clocking the vehicles, thus enticing the appellant to bid for vehicles he would not otherwise want (it being common ground that the appellant was primarily interested in vehicles which had travelled between 40,000 and 60,000 kilometres), there was absolutely no reason why Nikki would keep an internal record of the clocking with a fee of 5,000 Yen appearing under the “Oil” column.  There was, counsel submitted, no evidence to show this was a record intended to be seen by its customers or by anyone outside Nikki’s office.

[29]     Finally, and in the same vein as the submission detailed in [27] Mr Mather referred to [78] of the Judge’s reasons to the effect that there was no indication any other individuals, including Nikki, had anything to gain by the clocking.  Counsel submitted this conclusion was inconsistent with the earlier uncontested evidence of a fixed commission payable to the agent on 20 cars of approximately $20,000.

[30] We are satisfied that the Judge was entitled on the evidence to conclude that the appellant knew the relevant vehicles were being clocked. The alternative defence theory that Nikki or the agents clocked the vehicles for their own purposes was plainly untenable. As the Judge said at [107] of his judgment (set out at [19] above), there was no evidence to suggest that vehicles which had truly travelled between 40,000 to 60,000 kilometres were in short supply. There was therefore no financial incentive for the agents or Nikki to initiate the deception.

[31]     Furthermore, deceit on the part of Nikki or the agent assisting the appellant at auction would be explicable only if the appellant, not once or twice, but over 20 times, had failed to notice his agents were bidding on his behalf in respect of a vehicle with a higher odometer reading than he wanted.  Such an explanation is not credible.  The odometer readings were of critical importance to him and were on display in Arabic numerals during the bidding process.  It is scarcely believable that the appellant failed to note the odometer reading.

[32]     The alternative inference would also require an assumption that the appellant, who was in the business of buying and selling cars with an eye on price, never noticed and never inquired about the 5,000 Yen additional charge in respect of some of the vehicles he imported from Japan. 

[33]     The Judge heard the appellant’s explanation.  The Judge had before him a considerable volume of evidence about the Nikki auction procedures.  In our judgment no credible inference could be drawn from the facts other than the inference which, for the reasons he stated and set out at [19] (above) the Judge drew.

[34]     Our conclusion is thus that the Judge was justifiably satisfied beyond reasonable doubt that the appellant had knowledge of the clocking and that such a finding was properly open to him.

[35]     It follows that the appeal will be dismissed.

Solicitors:

D B Murton, Auckland, for Appellant
Crown Law Office, Wellington